Michigan Voters Refuse Tax Hike for Roads

Proposal 1, likely one of the most complicated and confusing questions ever placed on a Michigan ballot, was soundly rejected Tuesday as many voters expressed anger at lawmakers and state government for failing to come up with a better solution to the sorry state of the roads.

The Free Press called the election for the no side less than one hour after the polls closed, based on analysis of exit poll results and early returns showing the no side winning by 4-1 margins in many parts of the state.

Even before the polls closed on a rainy day across much of Michigan -- a fact expected to depress voter turnout already projected to be as low as 20% -- the talk had turned to what happens next.

"We need to go ahead and get these roads and infrastructure fixed immediately, given the nature and the extent of the damage that has occurred from not maintaining them," said Rep. Peter Lucido, R-Shelby Township.

But Tuesday's vote was not expected to make it easier to find a solution to the infrastructure problem Republican Gov. Rick Snyder and the GOP-controlled Legislature have grappled with for several years. Tuesday's result sets up a fight between tea party conservatives who want to address the roads issue without raising taxes and others in the Legislature who say the public is willing to pay more to fix the roads -- just not the way they were asked to do this time.

Proposal 1 would have hiked the state sales tax to 7% from 6%, taken the sales tax off fuel sales, and hiked fuel taxes -- raising close to $1.3 billion extra for roads.

When fully implemented, the plan would have also generated about $200 million a year more for schools; $116 million for transit and rail; sent $111 million more to local governments; and given a $260-million tax break to low- and moderate-income families through restoration of the Earned Income Tax Credit.

The complex nature of the proposal resulted from the need to replace school and local government revenues lost as a result of removing the sales tax from fuel sales to make room for higher fuel taxes, which unlike sales taxes, support roads and transportation. Features such as the restoration of the EITC were concessions to Democrats, whose votes Republican Snyder needed to get the plan through the Legislature.

The special election cost Michigan taxpayers about $10 million.

Compounding the voter dissatisfaction, most of the details weren't spelled out in the ballot language. Passage of Proposal 1 would have triggered into law 10 bills that the Legislature passed during an all-night, lame-duck session in December and tied to the success or failure of the constitutional amendment that went before voters.

"They had so many areas where they were directing the money," said Rick Confer, a newly retired resident of East Tawas in Iosco County, who voted no in Tuesday's election.

Confer, 62, who worked for a company that manufactured drywall, said he is tired of the state having its hand in his pocket. He wants to see an approach that identifies and eliminates government waste but doesn't cut funding for education.

Barbara Amble, a retired schoolteacher in Davison, said she voted for the plan although it had shortcomings.

"I know this isn't the answer for everything, but at least it's a step in the right direction," said Amble, who recently had to replace a rim on her car after hitting a pothole. "The schools could use the money and the roads and bridges have to be fixed."

Snyder acknowledged Monday that Proposal 1 exposed a level of cynicism about government among a sector of Michigan voters. But the governor said he thinks mistrust of government is much higher at the national level than when it comes to state government in Michigan.

The governor appeared at the headquarters of the yes side shortly after the polls closed, saying he he was still hopeful the measure would pass. But he conceded the proposal was lost a short time later.

"It will be relentless positive action and we're going to stay after this issue," he said. "We'll talk to the Legislature ... We usually work with fairly prompt action. We'll get in discussions with the leaders of both chambers."

House Minority Leader Tim Greimel, D-Auburn Hills, said voters were skeptical about having their taxes increased to fix the roads after watching Snyder and the Legislature approve corporate tax cuts of more than $2 billion a year since 2011.

"We need corporations to pay their fair share," Greimel said Tuesday. "The Democratic caucus is going to return to work and immediately and roll up our sleeves and try to find a sensible bi-partisan solution."

Greimel wouldn't be specific about where the extra revenue should be found, other than to say corporations need to pay their fair share.

But Sen. Marty Knollenberg, R-Troy, a member of the Senate Appropriations Subcommittee on Transportation, said the first step is to "look at our existing budget and see where we can find savings ... and start there."

Additional revenue is "a last resort," Knollenberg said. "We have restricted funds that have pots of money in them and we'll look at those. Whatever we do we have to make sure we're legally able to do it."

Sen. Patrick Colbeck, R-Canton, has suggested tapping restricted funds to help with road repairs where possible. For example, it's suggested the $500-million Natural Resources Trust Fund could be used to fix roads that run through state parks. But such funds are legally set aside for specific purposes and some are even protected by the state constitution.

Senate Minority Leader Jim Ananich, D-Flint, said the Legislature should start out with the smaller proposals to regain the trust of voters by passing laws that would raise fees on heavy trucks and require construction companies to provide warranties on road projects.

"Nobody wants to pay for roads and then pay for them again," he said.

"It's time for corporations and those at the top to contribute."

Lucido, who has a plan to fund road repairs using interest from the Michigan Catastrophic Claims Fund intended to help auto accident victims, said: "If the people are voting no tax increase, then you have to give the people what they deserve."

But the yes side released new polling information they said shows Michigan voters are willing to pay more to fix the roads, despite the rejection of Proposal 1.

Complexity is the enemy of the yes vote," said Safe Roads Yes spokesman Roger Martin. "Voters ... want a simple, straightforward solution that the Legislature approves."

As of Monday, the Safe Roads Yes committee, which pushed for a yes vote on Proposal 1, reported raising $9.6 million to spend on its campaign. Of that, $5.8 million came from the Michigan Infrastructure & Transportation Association, a lobbying group for road builders and their suppliers.

"Our roads are falling apart and each day we delay, the further we fall behind," said Mike Nystrom, the group's executive vice-president. "In the end, we need to do something real and we need to do something now."

The main no committee, the Coalition Against Higher Taxes and Special Interest Deals, reported raising just under $500,000 as of Monday, with nearly all of that coming from the group's chairman, Saginaw County businessman and Republican congressional candidate Paul Mitchell.

"I'm pleased with the part we played in making sure complete information about Proposal 1 got out to voters," despite being massively outspent by the yes side, Mitchell told the Free Press.

Bernie Porn, president of the Lansing polling firm EPIC-MRA, released additional results Tuesday from his latest Proposal 1 poll, conducted April 25-28 for the Free Press and WXYZ-TV (Channel 7). According to the newly released results, 64% of respondents said they would support a one percentage point increase in the sales tax if they knew all the extra revenue raised would go to roads, bridges and transportation.

"Voters are willing to pay more for better roads," said Roger Martin, who was the spokesman for the Safe Roads Yes campaign. "They just want to understand what the heck they're voting on."

It's the same poll in which 61% of the 600 likely voters surveyed said they planned to vote no on Proposal 1. The poll, which included 20% cell phone users, has a margin of error of plus or minus 4 percentage points.

Porn said he also asked the questions about a possible Plan B for clients the Michigan Health and Hospital Association, the Michigan Municipal League, and the Michigan Association of Health Plans.

Of those surveyed, 87% said Snyder and the Legislature should immediately begin working on an alternative road funding plan.

More than one in three voters -- 37%-- said they think the state can raise the needed money solely by cutting existing programs and services. Another 35% said it would be necessary to raise taxes and/or fees, while another 10% said a combination of cuts and new taxes would be needed.

But asked about specific cuts, 88% said they opposed major cuts to K-12 schools to pay for roads; 86% opposed big cuts in support for health care for the poor, elderly, disabled and children; 76% opposed major cuts to public safety; and 63% opposed big cuts to colleges and universities.

Of the respondents, 40% identified as Democrats, 38% as Republicans, and 22% as Independents or something else.

Michigan motorists would typically pay about $20 more for their vehicle registration fees and spend about $1.17 more for a 15-gallon fill-up under fee and tax increases passed by the Michigan Senate and House of Representatives Tuesday, as part of a $1.2-billion road-funding plan.
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